This follows the announcement that Humana has entered into a definitive agreement to acquire KMG America Corporation (KMG) (Minnetonka, MN), a publicly-traded group and voluntary insurance benefits and third party administration company. Humana plans to acquire KMG for a total of $187.7 million (which includes approximately $50 million of debt). The acquisition is to be financed by a combination of cash and debt. The transaction is expected to close in first quarter 2008, pending regulatory approval.

The acquisition of KMG by Humana is expected to further broaden Humana’s product portfolio by adding voluntary insurance benefit products, which is expected to complement Humana’s existing major medical offerings in the employer group and individual market segments. This acquisition also fits into Humana’s expansion of offerings in the individual market.

After the close of the transaction, Humana is projected to have a 27%-28% debt/capitalization ratio, which is adequate for the organization’s current ratings. This acquisition is the second to be announced by Humana in 2007 after a period of inactivity due to the organization’s focus on its expansion in the Medicare Part D and Medicare Advantage markets. Humana’s pending acquisition of CompBenefits, Corp. (CompBenefits) was announced June 19, 2007 and is expected to close in third quarter 2007. Humana grew its Medicare business significantly in 2006 and government contracts now account for approximately two-thirds of Humana’s total revenue. Current government funding of the Medicare programs is good, but proposed funding cuts could affect Humana’s revenue stream. The CompBenefits and KMG acquisitions are expected to generate additional revenue in Humana’s commercial business segment and to diversify cash flows for Humana. Humana is considered to be modestly capitalized and capital support of additional insurance entities, as well as, additional organic membership growth could pressure Humana’s capitalization.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

As used in connection with insurance products and services, “Humana” is the brand name for insurance products and services provided by one or more of the Humana group of insurer and health plan subsidiary and affiliate companies (each, a “Humana Ins. Sub.”). Insurance products and services are solely and only provided by the one or more Humana Ins. Subs. specified on the insurance policy, not Humana Inc. Not all insurance products and services are available in each state.

For medical insurance products and services -- Humana Medical Plan, Inc.; Humana Health Insurance Company of Florida, Inc. and Humana Insurance Company -- and for non-medical insurance products and services -- Humana Insurance Company; HumanaDental Insurance Company; Humana Health Insurance Company of Florida, Inc.; CompBenefits Insurance Company; CompBenefits Company and Kanawha Insurance Company -- are the legal entities that offer, underwrite, administer or insure insurance products and services for Florida residents or Florida-sitused groups and members of those groups for purposes of insurance law. For states other than Florida, please click here to view a complete list, by product line, of the legal entities that offer, underwrite, administer or insure insurance products and services.